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Wednesday, June 26, 2013

[Mongolia votes for President today, IAAC opens investigation on Bayartsogt, and cabinet approves 2030 green development policy]

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T. Bataar

Ownership of Lenin museum transferred to State Property Committee

June 25 (news.mn) The Ministry of Culture, Sport and Tourism along with the State Property Committee of Mongolia officially announced to the public the decision regarding the ownership of the Lenin Museum that was made at Chingeltei District Court on June 12th. 

During the press conference accredited lawyer of the Ministry of Culture, Sport and Tourism, T.Enkhbayar, the Chairman of the State Property Committee D.Tsogtbaatar and attorney L.Danzannorov announced that the State Property Committee had accessed the ownership of the Lenin Museum. 

The Court ordered that the State Property Committee should take possession of the Lenin museum situated on Independence Square, 6th block, 5th khoroo in Chingeltei District according to the  60.63rd article of Civil law dated 1963. 

The Court also order MPP (the Mongolian People`s Party) to move from the museum and hand over the ownership of the Lenin Museum to the State Property Committee according to article 106.1 of Civil law dated by 2002. 

Link to article

 

Overseas Market

Mongol Mining (00975) granted new mining license in Mongolia

[ET Net News Agency, 25 June 2013] Mongolian Mining Corporation (00975) said the Mineral Resource Authority of Mongolia has granted and issued a special permit for minerals extraction for Tsaikhar Khudag area to its indirect wholly-owned subsidiary Khangad Exploration LLC.

The new mining license covers a total area of around 8,340 hectares and contains around 73 million tonnes of coal resources according to the Mongolian geological and mining reporting standards. In accordance with the Minerals Law of Mongolia, the mining license was issued by the MRA for an initial term of 30 years (subject to two consecutive extensions of 20 years each) and Mongolian Mining will pay an annual fee of about US$41,700 for this license. (HL) 

Link to article

Link to MMC release

 

Prophecy Coal Provides Ulaan Ovoo Mine Update

VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 24, 2013) - Prophecy Coal Corp. ("Prophecy" or the "Company") (TSX:PCY) (OTCQX:PRPCF) (FRANKFURT:1P2) is pleased to provide the following update of its Ulaan Ovoo mine.

Since production was suspended in July, 2012 (see the Company's August 9, 2012 news release), management has examined all aspects of the Ulaan Ovoo mine, from mining and transportation to marketing and sales, with the goal of lowering production costs and increasing coal sales upon the potential resumption of mining at Ulaan Ovoo.

The Company is actively discussing several potential coal sale and purchase agreements with the goal of resuming mining operations in Q3 2013 and the ramping up of production throughout 2014. Ulaan Ovoo coal is marketed specifically to power plants, heat/boiler plants, cement factories, metallurgical plants, direct reduced iron plants, and railway companies. Ulaan Ovoo coal (5,000 kcal/kg GCV, < 1% Sulphur, < 10% Ash, < 3 % rocks) is well suited for all these applications.

Coal prices in the region have been largely shielded from global economic weakness. Current benchmark premium GAR 5,000 kcal/kg thermal coal pricing is exceeding $40/t in Mongolia and $50/t at several delivery points in the Russian Republic of Buryatia (Buryatia). These prices represent a material increase year over year. The Company is very encouraged by both the quantity requested by new and repeat customers, as well as current price trends.

The Company projects that Russian sales through Zeltura and Sukhbaatar border crossings will account for over 50% of the sales volume. In the past months, Prophecy has received written correspondence from Russian parties regarding the purchase of Ulaan Ovoo coal and/or the purchase of the Ulaan Ovoo mine itself.

The conditions for potential coal sales to Russia have improved in the following areas:

1.    The Mongolian government has lowered the benchmark pricing used to calculate export royalties, while the average coal price has risen in Russia's Buryatia region.

2.    Prophecy has had numerous meetings with Mongolian and Russian officials seeking the re-opening of the Zeltura border crossing between Mongolia and Russia. The Zultura crossing is less than 20km from Ulaan Ovoo, and the re-opening of the border would reduce transportation costs and potentially increase sales margins. The Company has received support from and continues to work with officials from both governments to re-open the Zeltura border crossing.

History of Ulaan Ovoo

Prophecy has successfully delivered over 300,000 tonnes of Ulaan Ovoo coal to 28 customers, with a track record of timely delivery and meeting or exceeding required coal quality specifications. Below is a brief chronologic history*.

H1 2013: Sold 45kt from stockpile, 106kt stockpile remains, $55million invested to date.

H2 2012: Production curtailed in July due to low prices and lack of market penetration.

2012: Produced 165kt (H1), Sold 131kt (including 2.4kt to Russia)

2011: Produced 205kt, Sold 127kt (including 6kt to Russia)

H1 2011: Capex $40 million invested to date

*H1: First Half, H2: Second Half, kt: '000 tonnes

Since 2010, the Company has invested over $55 million at Ulaan Ovoo. This includes road and bridge construction, mining vehicles, mining camp, pre-stripping, and other infrastructure and community improvement.

This news release is to provide investors and shareholders with an update respecting the current status of and the Company's intentions regarding the Ulaan Ovoo project. The Company cautions that at this time there are no specific plans to resume mining operations at Ulaan Ovoo, and no Russian coal sales and purchase agreements are in place. Prophecy's board of directors and management will continue to assess the conditions for potential mine restart and will disseminate information on the signing of any material coal sales agreements and any decision to restart the Ulaan Ovoo mine if and when these events occur.

Visit www.prophecycoal.com for a map of the Company's Ulaan Ovoo mine.

Link to release

 

Mongolia Growth Group Ltd. Publishes May 2013 Monthly Letter to Shareholders

Ulaanbaatar, MONGOLIA, June 25, 2013 /FSC/ - Mongolia Growth Group Ltd.   (YAK - TSXV) is pleased to announce the release of its May 2013 letter to shareholders.

May 2013 Shareholder Letter

To the Shareholders of Mongolia Growth Group Ltd.,

During May of 2013, MGG purchased one retail asset and did not sell any property assets. We are still actively involved in researching a number of sizable property assets that we are looking to purchase, but there can be no certainty that we will be able to agree on acceptable terms for a transaction.

During the month of May, management undertook a thorough review of all of our assets with the view of reducing our costs and eliminating certain assets that are either too small, outside of our core competencies in downtown Ulaanbaatar commercial property or too difficult to manage. In total, we have selected 23 property assets comprising approximately 27% of our total assets by number, 16% of our portfolio at cost and contributing 13% of our monthly rental revenue to dispose of. Despite producing a moderate portion of our total revenue, the expenses involved in managing these assets means that the actual net operating income produced by them is quite negligible as a percentage of our total property net operating income. We anticipate re-deploying this capital into one or two larger assets in the future that will have much more attractive return characteristics. In particular, disposing of these assets will almost entirely remove us from the ownership of residential properties with the exception of those assets that are owned for employee housing. It is expected that the majority of these sales will be completed by year end and that the company will show a gain on sale for the majority of the assets.

In addition, as a consequence of this review, MGG is assessing the amount of management time and cost required to administer Mandal, our insurance subsidiary together with the likelihood of profitability from Mandal in the near term, given the substantial costs of it being part of a public company with public company reporting obligations.  Thus far, all indications are that MGG would substantially reduce recurring expenses and free up considerable senior management time if Mandal is separated from MGG. To date, our findings are preliminary and nothing definitive has been determined in regard to disposing of Mandal. We are exploring various different avenues to best maximize shareholder value.

As our company has matured and become more experienced in the Ulaanbaatar property market, we have realized that we want to focus on larger income producing assets that are easier to manage. Outside of these, we are still focused on acquiring high street retail properties and redevelopment sites that we can build international quality buildings on. In the end, we want to grow into a company that owns institutional quality assets in Ulaanbaatar. The assets that we are disposing of do not make this cut.

On the 29th of May, we filed our first quarter, 2013 unaudited financial results. Our company reported a net loss for the period of $64,334. I should note that this loss included a $1,136,125 unrealized gain on fair value adjustment on investment properties. I would like to note that this gain is a non-cash accounting entry. These losses were the result of lower revenues caused by the depreciation of the Mongolian Togrog/Canadian Dollar exchange rate (leading to lower revenues), the final installment of our TSX-V listing expenses and very sizable one-time expenses related to a proposed acquisition that was not consummated. Excluding these two one-time expense items, we came very close to showing a break even EBITDA result after excluding share based payments and the unrealized gain on fair value adjustment on investment properties. We anticipate that our current small recurring losses will become moderate profits upon the conclusion of many of the non-recurring expenses and higher expected rents as recently remodeled properties are leased out. To that end, in early June, we leased out an additional 203  combined meters in Denver Center and Anand—which leaves us with only 309  remaining meters to lease out in these two buildings.

In the chart below, you can see the key segments and how they performed during the first quarter. For the sake of clarity, investment income relates to interest earned by the various divisions.

Property

Insurance

Corporate

Total

EBITDA

($8,820)

($334,705)

($912,336)

($1,255,861)

Share Based Payments

($136,832)

($174,547)

($315,495)

($626,874)

Investment Income

$97,797

$155,195

$155

$253,147

EBITDA Excluding Share Based Payments And Adding Investment Income

$225,809

$(4,963)

($596,686)

($375,840)

Gain On Sale Of Properties Included In EBITDA

$2,515

Certain highlights from the quarter include;

Property Results

·         Rental revenues were $414,385 (excluding intercompany revenues of $24,333 from Mandal)

·         Quarter end vacancies increased moderately to 6.3% vs. 3.3% % of rentable properties in the previous quarter. This is the result of shifting 2 office properties from the renovation category to rentable properties category following the completion of renovations.

·         Completed a sizable renovations program on three office buildings. When fully leased, these assets are expected to substantially increase rental revenues with minimal additional expected costs

·         Disposed of an investment property for proceeds of $40,443 with a $37,928 fair value for a $2,515 gain on disposal

Insurance Results

·         Net premiums earned of $342,117

·         Net claims incurred of $223,490

Corporate Information

·         Has grown to 102  total employees (93 Mongolian and 9 foreign)

Link to release

 

Who should be the third Mongolia board member in OT LLC?

June 24 (Business-Mongolia.com) Mongolian Government, through its Erdenes OT LLC, and TRQ or Turquoise Hill Resources Inc. owns the Oyu Tolgoi LLC's 34% and 66% respectively. According to the Shareholders Agreement the government has 3, and TRQ has 9 directors in the board.

The board directors from TRQ side is quite obvious, Rio Tinto appointed corporate soldiers, except for Mr. Batsukh Galsan, who is a former Mongolian diplomat and interestingly former Ambassador to Canada from Mongolia. From the government side the appointed directors are N. Bagabandi – former President of Mongolia and P.Tsagaan – Chief of Staff of the current President. Mr. Ch. Ganbold – was the third board member until he resigned on last March. Thus, leaving one seat open.

There hasn't been any news regarding the third director's appointment from either OT LLC or the government. However, by logic, the most suitable person on the job by rank or as a corporate culture, it should be Ts. Sedvanchig current Executive Director of Erdenes Oyu Tolgoi LLC. He is one of the first students who graduated in Japan and to lead Gobi JSC – the largest cashmere goods company in the country. Gobi JSC was one of the only two foreign currency source for Mongolia back in the days. He also has been a parliament member. His colleagues and friends currently dominate the regulatory sector of the mining industry of Mongolia such as Mr. D. Gankhuyag – current Mining Minister, also a Japan graduate.

Another, estimation would be Mr. G. Temuulen, a Deputy Director of Erdenes MGL, the parent company of both Erdenes OT and Erdenes TT (Tavan Tolgoi). Mr. G. Temuulen is working on Oyu Tolgoi project from the beginning. He was the secretary when Investment Agreement and Shareholder's Agreement were in negotiation. Without doubt, he has the knowledge and potential to be appointed as the third Board Member in OT LLC.

The previous balance on the board from the government was the members of both DP and MPP, then an assumed non aligned member which was Mr. Ch. Ganbold. However, the current situation dictates that all the members or at least two members will be DP member. Then, our second guess will be false, because Mr. G. Temuulen is a MPP member.

We will update our readers in due course on the matter.

Link to article

 

Draig: Coaltrans Mongolia 2013 Presentation: Opportunities for exporting high Volatile Matter (VM) metallurgical coals to China

June 25, Draig Resources Limited (ASX:DRG) --

Link to preso

 

BofAML trims Winsway (01733) to HK$0.56

[ET Net News Agency, 21 June 2013] BofA Merrill Lynch trimmed its target price for Winsway Coking Coal (01733to HK$0.56 from HK$4, and downgraded the stock to "neutral" from "buy". 

It said the downgrade reflects lower margin on its Grande Cache coal sales; higher inventory impairment loss; and higher risks of coal trading business. 

Winsway is currently trading at 0.51x P/B, a historical trough and 42% discounted to its peers. Hence, BofAML believes the downside is limited as the market appears to have already factored in a very pessimistic view.

The house cut its EPS estimates to -RMB0.12 in 2013 and -RMB0.01 in 2014. (KL)

Link to article

 

Origo: Interim Management Statement for the three month period from January 1, 2013 to March 31, 2013 

June 24 -- This Interim Management Statement by Origo Partners Plc ("Origo" or "the Company," AIM:OPP) and its subsidiaries ("the Group") relates to the three month period from January 1, 2013 to March 31, 2013 ("the Period"). 

Highlights from the Period: 

·         Unaudited net asset value of US$160.8 million compared to US$171.5 million for the period ending December 31, 2012

·         Unaudited net asset value per share of US$0.46 at the end of the Period compared to US$0.49 per share for the period ending December 31, 2012

·         Total investments of US$1.1 million

·         Net cash position of US$14.4 million 

1.   Resources and Commitments 

At March 31, 2013, Origo had cash and cash equivalents of US$18.9 million. Payables to debtors and other liabilities equaled US$4.5 million (excluding USR fair value movements and provisions for performance incentives) leaving the Group with a net cash position of US$14.4 million. 

In the Period, the Company repurchased 3 million Convertible Zero Dividend Preference Shares ("C-ZDPs") from holders at a price of US$1.00 per C-ZDP. 

2.   Unaudited Net Asset Value 

No revaluation of the portfolio took place during the Period as per Origo's policy to reassess the value of the Company's assets on a bi-annual basis. However, adjusting to reflect the purchase and sale of investments, currency movements and market values in respect of quoted investments, the Company estimates unaudited net asset value at the end of the Period was US$160.8 million (US$0.45 per share). The equivalent NAV per share translated into British Sterling at the prevailing exchange rate at the end of the Period was 29.7 pence which is the same as NAV per share for the period ending December 31, 2012. The decrease in NAV was due primarily to the movement of fair market value of quoted investments (US$3.6 million), currency movement (US$2.0 million) and ongoing operating expenses (US$2.3 million). 

3.   Portfolio Composition 

In line with the Group's strategy, investments are made predominately in privately held companies across various sectors of China's economy, and in companies and assets with exposure to the Chinese market, with the objective of providing shareholders with above market returns, primarily through capital appreciation. Currently, the Group focuses on the following sectors: metals & mining, agriculture and cleantech. 

As at March 31, 2013, the portfolio was carried at the aggregate value (excluding revaluations of unquoted portfolios) of US$203.5 million compared to US$209.0 million for the period ending December 31, 2012. The top ten investments represented 91 per cent of the fair value of the portfolio, with the top five investments accounting for 71 per cent. 

Table 1: Top 10 Investments (US$ million) 

Company

Sector

Instrument

Ownership*

Cost  

Fair value

% of NAV

 Gobi Coal & Energy Ltd

 Metals & Mining

 Common Stock

14.0%

15.0

53.6

33.3%

 China Rice Ltd

 Agriculture

 Preferred Stock & Loan

32.1%

28.0

33.9

21.1%

 Celadon Mining Ltd

 Metals & Mining

 Common Stock 

9.7%

13.1

23.2

14.4%

 Unipower Battery Ltd

 Clean tech

 Preferred Stock & Loan

16.5%

13.3

18.0

11.2%

 China Cleantech Partners

 Clean tech

 Limited Partnership Interests**

50.1%

15.0

15.0

9.3%

 Niutech Energy Ltd

 Clean tech

 Preferred Stock

21.1%

6.4

12.2

7.6%

 IRCA Holdings Ltd.

 Metals & Mining

 Common Stock & Loan

49.1%

25.8

10.2

6.4%

 Moly World Ltd

 Metals & Mining

 Common Stock 

20.0%

10.0

10.0

6.2%

 Kincora Copper Ltd

 Metals & Mining

 Common Stock & Loan

32.6%

9.3

4.4

2.8%

 R.M. Williams Agricultural Holdings Pty Ltd

 Agriculture

 Common Stock & Loan

17.0%

23.1

4.3

2.7%

*    Legal & beneficial interests, excluding impact of outstanding options/warrants and any outstanding convertible instruments

**   A private equity fund focusing on China's cleantech sectors, jointly formed and co-managed by the Group and Ecofin Limited 

Reflecting the Group's strategy of investing in privately held companies, 95 per cent of the portfolio (in terms of fair value) at the end of the Period was invested in unquoted portfolio companies. 

The Company's direct holdings in listed companies comprised stakes in HaloSource Inc. (LSE: HAL), Kincora Copper Limited (TSXV: KCC). (Mogi: looks like they sold off its stake in Voyager Resources)

The Group also has indirect interests in other quoted investments through its investments in two funds managed by the Group - the China Commodities Absolute Return Ltd ("CCF") and the Mongolia Stock Exchange ("MSE") Liquidity Fund.  

The weighted average holding period for the portfolio was 2.8 years, with 62 per cent of the Portfolio having been held for less than 3 years; 38 per cent having been held for 3 years or longer. 

In terms of sectors, the composition of the portfolio at the end of Period comprised: 

Metals & Mining (52 per cent)

Agriculture (19 per cent)

Cleantech (15 per cent)

Consumer, Technology and Media (4 per cent). 

4.   Investments and Divestments 

The Group invested a total of US$1.1 million to existing investee companies during the period.

Link to release

 

Origo: Audited Results for year ended 31 December 2012

June 24 -- 

Highlights of the year:

·         Chinese cleantech investments delivered strong performance, benefitting from increased demand and a supportive economic and political environment

·         Declines in commodity prices and political uncertainty in Mongolia significantly impacted the value of commodities investments despite generally good operational progress at portfolio companies

·         Appointment of three new Independent Non-Executive Directors, resulting in significantly improved corporate governance

·         Improved environmental and risk management processes developed to reflect Origo's growing focus on these issues

·         Net asset value: declined by 29 per cent to US$171.5 million (2011: US$240.6 million) reflecting the 32 per cent decline in the value of our commodities investments

·         Assets under management fell by 20 per cent to US$287.1 million (2011: US$358.1 million)

·         Loss after tax of US$69.0 million (2011: profit after tax of US$2.2 million) reflecting unrealised losses on investments

·         Total investments of US$21.3 million (2011: US$83.6 million)

·         Cash position of US$25.1 million as at 31st December 2012 (2011: US$56.9 million)

Commenting on today's announcement, Chris Rynning CEO of Origo said:

"Despite the decline in Net Asset Value recorded in 2012, I am optimistic about the prospects for Origo and am satisfied with the strong underlying performance of our cleantech, energy and resources investments. This decline of some 29 per cent in NAV was to a considerable extent attributable to a fall in the value of our commodities investments, reflecting commodity price declines and political uncertainty in the year."

"Against this complex background our main focus during the year was on supporting our portfolio companies, and identifying value accretive realisation opportunities. Our well diversified cleantech portfolio performed strongly, delivering a 21 per cent increase in value during 2012. I expect the cleantech portfolio to continue to perform well, and we are experiencing an unprecedented deal flow of attractive cleantech investment opportunities."

"We have three key priorities in the year ahead. First, we will carefully manage our cash position whilst assisting our portfolio companies with operational and financing issues where required. Second, we will look for the right time to exit investments in a way which creates maximum value for shareholders. Third, we will utilise our financial strength to capture investment opportunities which we believe have the potential to create value, with the cleantech sector an area of particular focus."

CEO's Statement

Commodity investments

We have a number of investments in good quality assets in Mongolia which are well placed to supply China's growing demand for industrial commodities. Having been present in Mongolia since 2009, we started to reduce our exposure there in 2012 as political uncertainty in the country escalated. We have therefore both substantially reduced our staff in Mongolia, reallocated resources and reduced the carrying value of a number of investments. This conservative approach to the valuation of our mining commodities investments is reflected in a 29 per cent reduction in their NAV.

Following a campaign by international investors, including Origo, the Mongolian Government has now signalled that it will withdraw or amend legislation to remove some of the most damaging restrictions on foreign investment. Whilst the final position remains unclear, we are cautiously optimistic that these events will lead to the creation of stable long-lasting relationship between foreign invested companies, the Government and people of Mongolia.

Although prices for many commodities have fallen in 2012, our faith in the long-term demand for key commodities such as coking coal and copper remains intact, and hence also the view that our assets in Mongolia are of strategic value. The upcoming Mongolian Presidential election in June 2013 is an important milestone and a key determinant of our future investment decisions in the country. We are actively looking to realize our positions in Mongolia if meaningful opportunities arise.

Portfolio review

Kincora Copper Ltd ("Kincora")

Copper remains a key component in electrical wiring, water pipes lithium batteries and desalination equipment and as such is complementary to our cleantech assets. Although copper prices have fallen from their peaks, they remain at attractive levels given both ongoing supply constraints and continued demand in China.  Kincora, in which we hold a 32.6 per cent stake, continued to deliver excellent drilling results which confirm the potential for a deep high grade copper deposit at its Bronze Fox project in Mongolia during the year.

Despite the difficult market environment in 2012 Kincora, with our support, successfully raised a total of CAD4.7 million to deliver on its drilling and business plan in 2013. That Kincora was able to raise funds at such a difficult point in the market is testament both to the management team and the potential of the asset. We continue to be deeply involved in the management of Kincora through Origo's technical and geological teams.

Gobi Coal and Energy Ltd ("Gobi")

We continue to believe in the high quality nature of Gobi's three open cast coal development projects, which contain approximately 95 million and 322 million tonnes of JORC compliant reserves and resources respectively. However, as a result of political uncertainty in Mongolia, lower coking coal prices and the resulting uncertainty around the timing of a potential IPO we significantly reduced the carrying value of Gobi at the half year and we have made a further adjustment at year end. As a result we currently value our 14 per cent stake in Gobi at US$53.6 million compared to US$87.1 million at the end of 2011.

Portfolio summary

The Company's direct holdings in listed companies included stakes in HaloSource Inc. (LSE: HAL), Kincora Copper Limited (TSXV: KCC) and Voyager Resources Ltd (ASX: VOR).  The Group also has indirect interests in quoted stocks through its investments in two funds managed by the Group - the Mongolian Stock Exchange Liquidity ("MSE") Fund and China Commodities Absolute Return Ltd ("CCF").

Assets under management

Our MSE Fund consistently reported positive monthly returns, reporting a positive return of 15.9 per cent since inception and outperforming its peers in 2012. The MSE Fund has participated in two private placements that are being listed on the Mongolian Stock Exchange at highly compelling valuation entry points which may see a re-rating once listed. The Fund's performance was positively impacted by the stability of the Mongolian Tugrik, a US$1.5 billion sovereign bond that was completed in November 2012 by the Mongolian government, and full implementation of London Stock Exchange Millennium IT software trading system which is now finally in place.

Our long/short mining fund, China Commodities Absolute Return Ltd ("CCF"), continued to source and capitalise on opportunities through taking long and short positions mainly in publicly traded equities. Currently, CCF is predominantly invested in companies with Mongolia based assets (c.60 per cent of portfolio).

Outlook 

We have three key priorities in the year ahead. First, we will carefully manage our cash position whilst assisting our portfolio companies with operational and financing issues where required. Maintaining close relationships with the founders and entrepreneurs behind our portfolio companies is a key element of our strategy and central to our ability to deliver value for Origo shareholders.

Second, we will look for the right time to exit investments in a way which creates maximum value for shareholders. However, whilst delivering exits is important, we believe that the long-term interests of shareholders will be best served by not selling assets at the wrong point in the economic cycle.

Third, we will utilise our financial strength to capture investment opportunities which we believe have the potential to create value, with the cleantech sector an area of particular focus. Our cleantech fund, China Cleantech Partners, has already received significant commitments and we have never had a stronger pipeline of new investment opportunities in the sector and we expect this trend to accelerate throughout 2013 and 2014.  

Finally, we have identified Myanmar as a potentially interesting jurisdiction for future investments given its location close to China and the currently low investment costs. We have yet to make any significant investment in Myanmar, however, we will continue to assess the potential to develop our presence in the country through low cost approaches, such as the recent joint venture agreement we signed with Serge Pun & Associates.

Link to release

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Local Market

STOCK EXCHANGE NEWS FOR JUNE 24

Ulaanbaatar, June 24 /MONTSAME/ At the Stock Exchange trades on June 24, a total of 156 thousand and 383 shares of 28 JSCs were traded costing MNT 54 million 656 thousand and 846.90.

Rates of 13 shares increased, of five shares decreased and of 10 were stable.

The total market capitalization was set at MNT one trillion 437  billion 680 million 004 thousand and 094. The Index of Top-20 was 14417.62. (Mogi: if Montsame could only just mention how the Top 20 changed, apparently it went up 0.22%, had to calculate this myself from closing rates)

Link to article

 

STOCK EXCHANGE NEWS FOR JUNE 25

Ulaanbaatar, June 25 /MONTSAME/ At the Stock Exchange trades on June 25, a total of 97 thousand and 776 shares of 18 JSCs were traded costing MNT 22 million 206 thousand and 676.00.

Rates of seven shares increased, of five shares decreased and of six were stable.

The total market capitalization was set at MNT one trillion 441  billion 833 million 011 thousand and 962. The Index of Top-20 was 14532.21. (Mogi: Top 20 was up 0.79%)

Link to article

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Economy

Bank of Mongolia Monetary Policy Statement: Cutting the policy interest rate by 1.0 percentage point

Number: 2013/04

Effective date: 25 June 2013

At its meetings on 20, 21 and 24 June 2013, the Monetary Policy Committee (MPC) of the Bank of Mongolia decided to cut the policy interest rate by 1.0 percentage point to 10.5 percent to support the real sectors.

The general government budget expenditure had been low and consistent with the budget revenue performances, the Price Stabilization Program against supply shocks had effectively been implemented, inflation had significantly been declining closer to its targeted level have enabled to reduce the policy interest rate.

Although, disbursement of the sovereign bond proceeds and sustainable home-equity and mortgage-financing scheme tend to have a positive impact on macro-financial environment, the MPC has prudently considered prolonged uncertainties in foreign trade and foreign investment environment on its decision.

Concise minutes of the MPC meeting will be released in two weeks on the Bank of Mongolia's website.

Link to release

 

BoM issues 1-week bills

June 24 (Bank of Mongolia) BoM issues 1 week bills worth MNT 100 billion at a weighted interest rate of 11.50 percent per annum /For previous auctions click here/

Link to release

 

BoM holds FX auction

June 25 (Bank of Mongolia) On the Foreign Exchange Auction held on June 25th, 2013 the BOM has bought 20 million USD and 64 million CNY from local commercial banks(Mogi: interesting how BoM sometimes decides to hide the auction prices, aren't they supposed to open and transparent?)

On June 25th, 2013, The BOM has sold 166 million USD and 10 million CNY for Swap agreement.

Link to release

 

EPCRC: MONTHLY MACROECONOMIC OVERVIEW, May 2013

June 24 (Economic Policy and Competitiveness Research Center) --

MAIN INDICATORS: GDP, STATE BUDGET, FOREIGN TRADE, EXCHANGE RATE, INFLATION

Economic growth slowed in the first three-months of 2013. Real GDP grew by 7.2 per cent in year-on-year terms, its lowest rate since the December qtr 2010, driven by a drop in coal prices and moderating Chinese demand for exports in the quarter. The result compares with a 14.6 per cent expansion for the same period last year and a 12.3 percent annual rate of growth for 2012. In current prices, GDP amounted to MNT 2,894 billion for the first three months of 2013 and grew by 16.3 per cent in the year to March 2013.

Government finances remained in surplus in May, with the accumulative budget surplus for the cental and local governments amounting to MNT 139.3 billion for the first five months of 2013. Compared to the same period last year, revenue increased by 10.5% to MNT 2,011 billion, while expenditure dropped by 15.8% to MNT 1,872.1 billion. However, the Central Government budget has remained in deficit in the first five months to May, with the accumulative deficit amounting to MNT 112 billion. This represents a 68 per cent reduction in the central government deficit compared to the same period last year, with revenue increasing by 13 per cent and expenditure reducing by 5 per cent compared to the five months to May 2012.

The trade balance was in deficit by USD 0.8 billion for the first five months of 2013. The total turnover of trade reached USD 4,111.3 million, a decrease of 5.6 per cent on the same period last year. Both exports and imports are lower compared to the five months to May 2012, with exports down 3.8 per cent and imports falling 6.8 per cent. Despite recent declines in imports, imports are still around 50% bigger than exports, explaining the USD 824 million trade deficit. Although exports for some products including iron ore, gold and cashmere have improved over the past year, coal exports have fallen by 44 per cent compared to the same period 2012. Trade figures will be watched closely in months to come with the expected opening of Oyu Tolgoi set to improve Mongolia's export performance.

The Mongolian Tugrik continued to depreciate against the USD in May. The monthly average MNT exchange rate against the USD is 1,438 showing a slight decline in value. The MNT depreciated against the USD in nominal terms by 1.5% compared to last month and by 9.1% compared to the same period last year. The total amount of foreign currency reserves reached USD 3386.8 million decreasing by 3.6% compared to the previous month. Compared to the Janaury 2013 it decreased by 15.2%.  

The inflation rate decreased slightly in the year to May falling back to single-digit figures to 9.7%, down from 10.4% in April. Inflation for the month of April was a modest 0.3%, a big fall from the 1.1% increase recorded in March. Food prices are continuing to drive inflation growing by 13.8% in the past year, with meat ànd meat products rising rapidly (up 3% in the month to be 14.4% higher than a year ago). Rent prices actually fell 2.2 per cent in the month, but are still 13 per cent higher than last year. The year to date inflation rate was 5.1%.

FINANCIAL SECTOR: MONEY SUPPLY, DEPOSITS, LOANS

The money supply (M2) increased by 10.2% in May 2013 reaching MNT 7.9 trillion or USD 5.5 billion. M2 is 17.5% higher compared to the same period last year. Currency issued in circulation increased by 9.4% from last month and 6.1% compared to the same period last year to reach MNT 831 billion. Currency issued in circulation amounts to 10.5% of the M2. This ratio has been falling in recent years, down from 14.1% in April 2010.

Monthly deposits rose to MNT 5.1 trillion in May (USD 3.6 billion), up by 9.5% from last month and 21.6% higher compared to May 2012. Deposits in MNT increased by 7.8% compared to the previous month, while deposits in foreign currency rose by by 15.6%, more than reversing last months large decline in foreign currency deposits. Compared to the same period last year, deposits in MNT increased by 30.6% while deposits in foreign currency were down 0.9%.

Non-performing loans increased in value in May, but continued to decrease as a share of total loans. Loans outstanding reached MNT 8,226 billion or USD 5.7 billion. It increased by 6.0% compared to last month and by 34.4% compared to the same period last year. Non-performing loans increased by 2.4% from last month and increased by 0.7% from last year. Non-peforming loans amount to 3.9% of the total amount of loans outstanding.

Monthly highlights

Ø  "Mongol 93" petrol, which is delivered in return for importing Tamsag oil, is now available on the market. The Mongolian Government made the suggestion to take petrol from Huhhot oil refinery, which imports Tamsag oil from Mongolia.

Ø  In order to support construction sector and stabilize the retail price of housing The Bank of Mongolia transferred money to commercial banks that should issue credits in easy terms to suppliers of building materials.

Ø  The National Statistical Office of Mongolia and the World Bank jointly announced poverty estimates that are benchmarked against one base year. The poverty rate was 27.4% in 2012 showing a slight improvement compared to the 29.8% in 2011.

Ø  Mongolian parliament passed a securities law which will allow companies to list on multiple market.

Summary

The supply of foreign currency continued to fall in May due to the decrease in exports and foreign direct investment, and exacerbated by the depreciation of the exchange rate. Foreign currency has fallen 15.2% since the beginning of the year to MNT 3386.8 million. The Bank of Mongolia (BoM) has conducted foreign exchange auctions in order to stabilize the national currency but these measures have so far made little impact. The fall in the exchange rate has had some positive influence through an increase in the profits made by resource exports when converted into MNT. However, the inflationary effect on imported goods and commodities due to the depreciation in the exchange rate should not be underestimated.

There has been criticism from economists that a significant amount of the government's current budget expenditure is being financed through indirect off-budget mechanisms. The Price Stabilization Program that began in December 2012 is intended to last for three years and continues to provide cheap loans to specific industries including petroleum, meat, flour, construction materials and transport to maintain price stability. There is also the more recent arrangement between the Government and the Bank of Mongolia for MNT 900 billion in loans being made available for domestic commercial banks to use in helping address the current liquidity problem in the domestic financial with the funds backed by the '"Chinggis" bonds. At the same time commercial banks have invested large sums in the bills issued by BoM and the government's Treasury bill, suggesting that local banks are in fact supporting these programs.

The BoM has begun to cut interest rates on mortgages by almost half to 8 percent from around 15 percent this month, following a new policy approved by the government to ease financial burdens on the middle class. The new mortgages came into effect on June 17, require a down payment of 10 percent to 30 percent and must be paid back in 20 years. The loans are valid for apartments smaller than 80 square meters (861 square feet), qualified applicants must have a full-time job, and monthly payments cannot exceed 45 percent of the family income. The program is focused squarely on the middle class on Mongolia and is hoped will also adsorb the increasing number of vacant units outside the city center and modernize the ger districts.

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Politics

De Facto: On Last Night's Presidential Candidates' Debate

June 25 (Jargalsaikhan Dambadarjaa) Last night June 24th, the first ever live Presidential candidates debate held place on Mongolian National Television. I would like to share my opinion on this topic on todays Vlog.

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Presidential Q&A

By Julian Dierkes

June 24 (Mongolia Focus) The general view in Ulaanbaatar was that Bat-Erdene was trailing Elbegdorj significantly in voter support in some part because of his lack of political experience, and profile and the fact that he doesn't "look presidential". This latter judgement is not about his stature which is quite presidential as you would expect from a former wrestling champion. Rather, this refers to the observation that Bat-Erdene has not been politically very active in parliament and, in particular, does not have any international experience. He also is not terribly charismatic in large public events, though some have mentioned that he connects very well with people in smaller settings.

This was the set-up for the presidential candidates' Q & A on Monday, June 24 at 21:45h on public broadcaster MNB's main channel: Elbegdorj was looking not to make a mistake, Bat-Erdene was looking to score big to carry some momentum into Wednesday's election, and Udval's performance was probably irrelevant.

In a nutshell

Elbegdorj looked presidential if a bit stiff, but did not make a mistake

Udval was surprisingly engaging and fairly moderate in her statements

Bat-Erdene was awkward

Note that we watched the debate at a highway rest-stop in Baganur (Mogi: Baganuur) and the electricity went out during the 8th question.

Format

373 questions were submitted to MNB, the public broadcaster which were then condensed. Candidates drew lots as to the order they would start. They then rotated the order in which they addressed questions addressed to them by two moderators. The opening statement was just a minute, answers to questions two minutes long. A beep signaled that the end of the answer period was approaching. Other than some fumbles by Bat-Erdene who jumped out to answer questions before his "shot clock" started ticking, candidates stuck to rules. They did not engage each other directly (at least not until the 8th question when our electricity cut out). The format would thus be more appropriately called a Q&A session rather than a debate as Twitter follower Mukhit pointed out to me.

Substance

After the opening statements, the first seven questions focused on the following topics: Values, representing Mongolia abroad, current socio-economic situation, judiciary, military, mining and its impact on the economy, Mongolian traditions, education.

In the answers to these questions there were no surprise announcements, nor did any of the candidates make any radical statements of any kind. Answers were generally very similar, as the platforms were, and differed in style and emphasis but not in substance.

When asked about their values, the candidates highlighted citizens' halls and democratic participation (Elbegdorj), sovereignty (Bat-Erdene), and justice. [I will return to Elbegdorj's emphasis on citizens halls in a future post as this appears to have been significant in his campaign in the countryside].

In response to the question on international relations, all three candidates mentioned and emphasized good relations with the two immediate neighbours as well as a continuing focus on the "3rd neighbor" policy.

Udval got the best reaction in the whole debate (from our audience) in her response to the question about the socio-economic situation. She pointed out that more than 30% of Mongolians are poor, so that would probably make her the poor one among the candidates. Somewhat surprisingly, Elbegdorj immediately jumped on electricity as the most important issue for the socio-economic situation. Other answers were fairly bland, as they were on the judiciary which is an obvious area for Elbegdorj to emphasize his past record.

Regarding the military, Bat-Erdene and Udval both mentioned cybersecurity as a new threat for security policy to address.

Udval's answer on mining was somewhat surprisingly mild in that she did not really embrace any kind of explicit elements of resource nationalism, either as an ideology or in terms of practical policy implications. Elbegdorj emphasized that there needs to be not just a policy on production, but also on mining exploration, while Bat-Erdene mentioned the need for a build-up of processing capacity in addition to mining itself.

The question on Mongolian traditions could have been an easy opportunity for Bat-Erdene, but even on this question he didn't really deliver. Elbegdorj answered first and discussed the need for Mongolian traditional roots to enable him to serve as an example for the people. Bat-Erdene spoke quite broadly and mentioned odd specifics like UNESCO world heritage designation. Udval dropped a reference to the ancient capital of Kharkhorum.

Appearance

Elbegdorj clearly looked presidential. He was calm and collected, handled his time well and spoke in a straightforward manner, though he seemed a bit tense at some times.

Surprisingly, as she had come across as fairly wooden to me in reporting on campaign events, Udval was quite engaging and probably worked the camera best of the three by looking at the moderators, but also engaging viewers directly without staring at them through the lens. On the chest of her deel she was wearing a green gem of some kind that occasionally reflected the studio lights for a quick flash. Less impressive compared to the other candidates was that Udval referred to her notes most often while both Bat-Erdene and Elbegdorj spoke freely. One of the Mongolians in our audience commented that she spoke beautifully in terms of her choice of words and phrases. She seemed the most relaxed of the three.

Bat-Erdene did not come across as very presidential. His suit was ill-fitting, he was sweating, and he shifted his eyes from side to side. He also struggled with time-management and had an on-going battle with the studio clock.

Conclusions

Udval won this debate, but it will most likely not make that much of a difference to the outcome other than that she might be taking more votes from Bat-Erdene than anticipated.

Elbegdorj continued to play it safe with an incumbent's campaign and didn't fumble any of the questions.

Bat-Erdene did not shine and likely did not improve his chances significantly.

Since the debate came on the last night of the campaign (Tuesday, June 22 is a day off from campaigning before the election on Wednesday) it may have a significant impact on undecided voters. It's hard to imagine that many of them were swayed by Bat-Erdene's performance, so if anything the debate reinforced the general expectation that Elbegdorj is heading victory, perhaps even likely without a run-off.

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Mongolian politics – a wrestling match

By Julian Dierkes of the University of British Columbia

June 25 (FT beyondbrics) As Mongolia gears up for its presidential election on June 26, wrestlers have increasingly become part of the political landscape. Both main parties in Mongolia now count sporting heroes among their prominent members. The Mongolian People's Party has even nominated a former wrestling champion, B Bat-Erdene as its candidate in the election.

Has Mongolian politics become a grappling sport?

Wrestlers have been part of the political mix in Mongolia for some time: from the old-time champions Kh Bayanmunkh and J Munkhbat who helped frame the country's democratic constitution in the early 1990s, to former Grand Champion Sumo wrestler Asashoryu (D Dagvadorj) who publicly declared his support for the governing Democratic Party this May.

The export of wrestlers is also an important part of Mongolia's soft power arsenal in international relations. The trailblazing D Batbayar was among the first Mongolians to embark on a career in Sumo under the name of Kyokushuzan in the mid-1990s, and became a member of parliament only two years after retiring from Sumo.

Bat-Erdene was somewhat of a surprise choice as the nominee for the Mongolian People's Party (MPP). Although he has served in parliament since 2004, he has not made a name for himself through legislative initiatives other than his involvement in the "Law with the Long Name". This law was intended to protect ecologically fragile areas from mining activities, but has been only sporadically and haphazardly enforced.

The lack of a political record has emerged as a handicap in Bat-Erdene's campaign and fueled some voters' sentiments that he is not presidential enough. A comparison of the records of the two main candidates, Bat-Erdene and incumbent Democratic Party (DP) candidate Ts Elbegdorj, is currently circulating in Mongolia. This comparison notes that when Elbegdorj was leading a democratic revolution in 1990, Bat-Erdene was wrestling. When Elbegdorj became prime minister for the first time in 1996, Bat-Erdene was still wrestling. Bat-Erdene will have to work hard in Monday's candidate debate to overcome the unfortunate comparison and his lack of political experience.

There is a third candidate as well, N Udval, the first female candidate for president, nominated by the Mongolian People's Revolutionary Party that is a member of the governing coalition alongside the Democratic Party. Her main impact on the election result appears to be that she is splitting the vote opposing Elbegdorj, but that she might also lay the ground for a run-off election between Elbegdorj and Bat-Erdene where her supporters would go to Bat-Erdene and give him an edge in such a run-off.

The grappling match between Bat-Erdene and Elbegdorj is that of a well-established, long-time champion against a challenger who is counting on the support of spectators who want to see a more balanced contest. Bat-Erdene represents a challenge to the dominance of the highest offices in Mongolia that are currently all held by the DP. This is one of the core messages of his campaign, while the Elbegdorj campaign is focused much more on his past achievements as a two-time prime minister and incumbent president.

Among further similarities between Mongolian politics and wrestling are participants' multiple identities as they build their athletic or political careers. The organisation of political parties and political contests within and between them follows he same rules as those of wrestling.

Wrestlers who move up through the ranks at local and provincial tournaments are often spotted and integrated into provincial networks. These networks might provide training facilities, financial support and mentoring to young wrestlers. Alternatively, a wrestler might join a club that is associated with private business conglomerates, or with parts of the government (army, police, etc).

A Mongolian wrestling match appears to be a highly individualistic contest held outdoors and infused with cultural symbolism such as the bird dance that precedes bouts. The rules are very clear: the wrestler who first touches the ground with anything other than the soles of his feet or palms of his hands loses. This result is clear to spectators, just like winning or losing an election should be clear. Yet, membership in a team provides a wrestler some insurance against uncertainties surrounding matches that result from poorly specified governance structures.

When the field of 512 wrestlers in the national tournament has been reduced to 32 combatants after the fifth round, higher-ranked wrestlers select their next opponent. It is in such critical moments where rules are unclear and many wrestlers have alleged corruption and match-fixing. For example, "Jijig" Sukhbat (Mogi: or the small Sukhbat, as there was a "big" Sukhbat wrestler at the time) climbed wrestling rankings just as current presidential candidate Bat-Erdene was at the zenith of his career in the mid to late 1990s. Sukhbat has repeatedly questioned the governance of wrestling in Mongolia and has now joined the DP.

Political teams, ie parties, have not coalesced around ideological or policy preferences. Instead, they are associations of individuals with competing identities who are seeking power, fame, and protection against the hazards of their chosen career. Parties charge candidates fees to run in elections and in return offer access to government offices when they win. Party allegiances are often to individuals rather than to a particular direction of policymaking.

Of course, the lack of an ideological basis and murky governance of political parties are neither unique to Mongolian democracy, nor to wrestling. But just like a good wrestling match, the outcome of the election on June 26 remains to be seen.

Julian Dierkes is an associate professor at the University of British Columbia and blogs at mongoliafocus.com. Follow him @jdierkes

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Incumbent favored over wrestler in Mongolia polls

By GANBAT NAMJILSANGARAV

ULAN BATOR, MONGOLIA, June 25 (AP) — A popular ex-wrestler and a physician, the first woman to seek Mongolia's top office, are the main rivals to the Harvard-educated incumbent in Wednesday's presidential elections, but neither is likely to wrest the job from him.

The election campaigning in this northern Asian nation has been dominated by debate over corruption, which President Elbegdorj Tsakhia hopes will work in his favor - throughout his 4-year term, the former journalist has attacked bribery and embezzlement, weeding out graft in the national airline, public welfare funds and among the custodians of Mongolia's vast mineral wealth.

But he has also been accused of shielding his party members from corruption investigations.

"I'm your son. I know your pain and struggles," Elbegdorj, 50, told cheering supporters at a final campaign rally Sunday in the capital, Ulan Bator. "I know exactly what I will do if I'm re-elected. I will continue my fight against corruption and finish what I already started."

This year's election has again raised the question of how best Mongolia, a staunch U.S. ally, should benefit from its boom in the mining of coal, copper, gold, and other minerals. The newfound wealth has propelled the economy to dizzying heights, but also contributed to soaring inflation and further skewed the uneven wealth distribution in the landlocked country, squeezed between China and Russia.

Polls show Elbegdorj, of the ruling Democratic Party, with a strong lead over his rivals.

Elbegdorj, who has a degree from Harvard University's Kennedy School of Government, has also been highlighting his political origins as a leader of the 1990 protests that ended 70 years of one-party Communist rule and gave birth to a thriving democracy in a region better known for stern dictatorships.

He was elected president in 2009 after serving two terms as prime minister. He lives with his wife, mother and 25 children of whom 20 are adopted.

Along with fighting graft, he has promised to enact further legal reforms, increase public participation in government decision-making, and boost the Alaska-sized nation's participation in global institutions.

"Before Elbegdorj, nobody dared touch these corrupt officials protected by their party leaders," said retired Ulan Bator accountant Tungalag Tsedevdorj, a supporter of the president.

"Now we are hearing and seeing about the arrest and jailing of corrupt government officials," Tungalag said.

Elbegdorj's main rival, opposition Mongolian People's Party lawmaker Baterdene Badmaanyambuu, is a former wrestling champion who has portrayed himself as a clean politician committed to upholding national unity and fighting the environmental degradation brought by the mining industry.

Mongolians have huge respect for their traditional burly wrestlers, who compete bare-chested in boots and leather shorts, and Baterdene has successfully leveraged that popularity to win three terms to the Great Hural, Mongolia's parliament.

Baterdene, who towers over most of his compatriots with a height of 177 cms (5 feet 10 inches), is one of Mongolia's most successful wrestlers ever. He is a 11-time winner of the Mongolian national competition of Naadam that combines horse racing, archery and wrestling.

Baterdene, who also holds a master's degree in law, has vowed to overcome regional rivalries in the herding nation of 3 million people, a third of whom are poor, further root out corruption, and rid law enforcement and the justice system of political influence.

A third candidate, Health Minister Udval Natsag, is Mongolia's first woman to vie for the presidency and a staunch backer of former President Enkhbayar Nambar, now serving time in jail for corruption.

Elbegdorj's Democratic Party also controls the legislature under Prime Minister Altankhuyag Norov, although elections for that body are not due until 2016.

Baterdene, who is No. 2 in the race, has pledged to review a multibillion-dollar investment agreement signed with Anglo-Australian mining giant Rio Tinto, and has sworn to fight corruption regardless of who is implicated.

"I will not discriminate based on the notion that this is my party member or my brother," he said.

Baterdene, 49, has himself faced unproven accusations that he acquired a former state farm on the cheap through a murky privatization deal, and - perhaps most seriously in a land where herd animals have long been the basis of survival - sold hay bales to China in the middle of calamitous winter blizzards.

Critics of the president say he and his party are using the anti-corruption campaign as cover for politically motivated attacks on Baterdene's Mongolian People's Party. They point out that no Democratic Party members have been investigated or arrested by the country's anti-corruption body, the Independent Agency Against Corruption, run by Elbegdorj's allies, and say the judicial and law enforcement branches have effectively become Democratic Party auxiliaries.

Third-running Udval has sought support from female voters and also raised complaints that deals with foreign mining firms have failed to benefit ordinary Mongolians and threaten the country's economic independence.

Udval, 59, began her career as a neonatology doctor in 1978 and held various senior medical positions before entering politics in 2011. She was appointed health minister last year.

"Mongolia is facing a new choice. It is time to decide whether Mongolia can exist or not. If we can't make a new choice, we face the prospect of living as the colony of a foreign people," she told supporters.

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Mongolia wrestles with its past in presidential election

By Leslie Hook

June 25 (FT) Mongolia's presidential election on Wednesday pits an experienced bureaucrat against a famous wrestling champion with the winner having a big say in what happens in one of the world's fastest growing economies, just as it begins to struggle with falling commodity prices.

The extraordinary economic growth in Mongolia in recent years – which hit 17.5 per cent in 2011 before slipping to 12.3 per cent in 2012 – has been built on vast deposits of copper, gold and coal, and the proximity to China, its largest commodities buyer.

However falling commodities prices and a fall in foreign investment this year have hit government revenues and put a question mark over prospects for growth. Although the World Bank has projected that the Mongolian economy will grow at 13 per cent this year – a very handsome rate in the current global climate – it also warned that there was "significant uncertainty" over the outlook because of changing commodities prices.

Another significant factor will be slowing growth in neighbouring China where commodities demand is waning.

The election has also become a proxy for the widening social divisions that cleave Mongolia, a traditionally nomadic society that is rapidly urbanising.

The incumbent, Ts Elbegdorj, nominated by the ruling Democratic party, is an experienced bureaucrat who twice served as prime minister before his current presidential term. While in office he presided over a tough anti-corruption campaign and judicial reform, and one of his top economic priorities is diversifying the Mongolian economy beyond mining.

He has a wide lead in polls in the capital city of Ulan Bator – home to a third of Mongolia's population – with 54 per cent of respondents in a recent survey conducted by the Sant Maral Foundation saying they planned to vote for him.

However in the countryside support is running high for former wrestling champion B. Bat-Erdene, who has campaigned on a platform of traditional values and is seen by voters as representative of Mongolia's nomadic way of life. A well-known wrestler in the 1990s, he became a member of parliament in 2004.

"He is considered a symbol of this old nomadic culture, a walking symbol of this dying tradition that cannot survive the 21st century," said L. Sumati, a political observer and director of the Sant Maral Foundation.

"As a wrestler, he is a real symbol of what they left behind when they moved into cities." Polls show Mr Bat-Erdene could win more than 30 per cent of the vote in Ulan Bator, and even more in the countryside.

Also in the running is Mongolia's first female presidential candidate, N. Udval, representing the Mongolian People's Revolutionary Party. She is projected to win about 9 per cent of the vote, which could be enough to force a run-off between the top two candidates if neither wins an outright majority in Wednesday's vote.

Unlike the parliamentary elections in 2012, when many politicians promised Mongolian citizens a bigger share in the country's mineral wealth, specific proposals for new mining policies have been largely absent from the presidential contest. Voters' top concerns are unemployment and improving the standard of living, and the candidates have focused on economic growth and environmental protection.

One reason for that, say observers, is the fall-off in foreign investment this year, the extent of which is still unknown. But they believe it has made politicians reluctant to target international mining companies. A restrictive foreign investment law passed last year was amended this spring to make foreign investment easier, but inflows still remain low.

"Now the currency inflow to the country is almost stopped," said D Jargalsaikhan, an economist and political commentator. "We have a big economy, but still a very vulnerable economy."

A priority for the new president will be to guide a new set of amendments to the mining law through congress. An initial draft of the law submitted to parliament last year included provisions that would restrict foreign mining activity, such as mandating Mongolian partial ownership of any active mine, although the draft is in the process of being reworked and could change significantly.

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Q&A: Mongolian presidential election

June 25 (BBC News) Mongolians go to the polls on 26 June to elect a president. While the election is unlikely to change the country's immediate course, it may decide how its vast mineral riches are used.

Since the collapse of the communist one-party system in the 1990s, Mongolia has become a fast-growing economy with a vibrant democracy. Much of this transformation was fuelled by efforts to exploit one of the world's largest untapped mineral reserves.

Who are the candidates?

Only candidates nominated by parliamentary parties or coalitions can run for president in Mongolia. Three candidates were put forward in 2013:

-       Incumbent President Tsakhiagiin Elbegdorj was fielded by the ruling Democratic Party.

-       Former wrestler and three times MP Badmaanyambuugiin Bat-Erdene was nominated by the main opposition Mongolian People's Party. It single-handedly ran the country for decades until the first multi-party elections in the 1990s.

-       Health Minister Natsag Udval (Mogi: well, BBC, if you wanted to follow the above name structures, it should be then Natsagiin Udval) was nominated by the Mongolian People's Revolutionary Party, which split away from the Mongolian People's Party after it dropped the word "Revolutionary" from its name. She is the first-ever woman to run for president in Mongolia.

What is at stake?

Responsible mining and the fair distribution of the new-found wealth are among the key issues in the election dominated by "resource nationalism" (Mogi: no, it's not dominated by this issue). Major multinational companies were invited by the government to help take advantage of the huge mineral reserves, leading to a boom which turned the country into what some call "Minegolia". However, critics say that this has bred inequality and corruption, and also damaged the environment.

Mongolia's biggest project ever, the giant Oyu Tolgoi copper mine, has also been at the centre of controversy. The government in Ulan Bator and mining giant Rio Tinto are locked in a dispute over how the mine should be run and how revenues from it should be spent. Plans to start copper exports from the mine were halted at the last minute less than a week before the election.

Oyu Tolgoi is slated to become one of the world's largest copper mines and eventually provide up to a third of the country's GDP.

What are the candidate's platforms?

Of the three candidates, President Elbegdorj is seen as the friendliest towards foreign investors. A veteran pro-democracy campaigner, Mr Elbegdorj was one of the leaders of the peaceful revolution that ended communist rule in 1990. He also has decades of experience at the highest state level. Tsakhiagiin Elbegdorj served as prime minister twice before coming to power as president in 2009. He is now seeking a second four-year term of office which, under Mongolia's constitution, would be his last.

The incumbent president's election rivals accuse him of allowing foreign investors and corrupt officials to cash in on the mining bonanza without sharing enough with ordinary Mongolians.

Mr Bat-Erdene, a critic of the Oyu Tolgoi project, is prominently linked to a law on protecting the environment from damage caused by mining. As an opposition candidate, Mr Bat-Erdene says he is untainted by official corruption, putting an emphasis on his "clean hands" during campaigning. He is popular in rural areas and portrays himself as a defender of traditional values.

Ms Udval is most known for her staunch support for Nambaryn Enhbayar, former president and current leader of the Mongolian People's Revolutionary Party. In August 2012, he was sent to jail for corruption - a charge dismissed by his supporters as politically motivated. Natsag Udval, who kicked off her election campaign by visiting Nambaryn Enhbayar in hospital, is seen by many as a stand-in for the jailed ex-president.

Is there much excitement?

Campaigning has been calm and low-key. There are relatively few billboards in the streets, but campaigners have been holding rallies across Mongolia, handing out leaflets and party newspapers.

One reason why electioneering is subdued is the rather restricted powers wielded by Mongolia's presidency. The president can decide on security and foreign policy, as well as make important appointments, but parliament often gets the final say on other issues.

Another factor that puts a damper on campaigning is Mongolia's election law, which was passed in December 2012. Under the law, candidates' platforms cannot include issues deemed outside of the president's restricted remit.

The law also bans private TV stations from broadcasting more than an hour of election advertising per day. There has been confusion over whether the media are allowed to include election coverage in their news programmes at all.

Criminal liability for libel further restricts campaigning.

Are elections normally that calm in Mongolia?

In 2004, the contested outcome of parliamentary polls resulted in political deadlock which, in turn, triggered protests in the capital, Ulan Bator, in March-April next year. The demonstrators demanded the government's resignation and an end to poverty and corruption.

Following the next parliamentary polls in 2008, the ruling Mongolian People's Revolutionary Party (MPRP) was accused of vote-rigging. Riots ensued, in which five people were killed and hundreds injured.

Presidential elections, however, generate much less excitement in Mongolia.

Who is expected to win?

The incumbent president, Mr Elbegdorj, is widely expected to win. In a survey by the Sant Maral foundation, 54% of those polled said they would vote for him, followed by 37% who said they supported Mr Bat-Erdene and 9% for Ms Udval.

If none of the candidates wins more than 50% of the vote, a runoff will be held on 10 July.

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Mongolians set to return incumbent in presidential electionsbne, June 25

Video: Mongolia set for 'fairest' presidential pollAl Jazeera, June 25

 

Mogi: hahaha, what? Oh dear!, oh brother!, my god!, huh?, how else should I express my emotions here?

Mongolian president's return could prolong Rio Tinto's Oyu Tolgoi pain

June 25 (The Australian) RIO Tinto's problems with the stalled $US10 billion Oyu Tolgoi copper-and-gold mine in Mongolia might not be helped by the country's elections tomorrow.

Global analytics consultancy IHS says the incumbent president, Tsakhiagiin Elbegdorj of the Democratic Party, is expected to win the elections, prolonging Mongolia's push to take more of the project than was agreed in an investment regime with Rio. (Mogi: IHS, what meds are you on?)

Rio has already warned it might not go ahead with a second, more profitable stage of the big mine if certainty cannot be obtained.

"While Elbegdorj supports legal reforms and is publicly committed to foreign investment, he supports increasing the level of state and local government control of the mining sector," IHS analyst Neil Ashdown said. (Mogi: no he does not, he actually advocates less government involvement in the business sector)

Oyu Tolgoi was supposed to start exporting on June 14 but has been delayed by the government twice.

"It is possible the delay relates to the ongoing negotiations between the government of Mongolia and Rio Tinto," Mr Ashdown said.

"If this is indeed the issue, then it is unlikely to be resolved until after the elections."

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Similar:

Mining wealth distribution at heart of Mongolia's presidential electionsMINING.com, June 25 (Mogi: again, who died and made this IHS's Neil Ashdown an expert on Mongolian politics?)

Election fever disrupts Rio's Mongolian shipmentsThe Australian, June 26 (Mogi: another crazy article from the same author, says OT could be delayed for weeks, without citing anyone or evidence)

 

Anti-corruption agency opens Bayartsogt investigation

June 24 (news.mn) The Anti -Corruption Authority has started an investigation into S.Bayartsogt after the Prosecutor General"s Office accepted the investigation request made by the ACA. 

After it was revealed that MP S.Bayartsogt fail to include his secret Swiss bank account and offshore entity in the income and asset declaration as a State official, the Ethic`s Sub-Committee of Parliament discussed the issue. The Ethic`s Sub-Committee of Parliament agreed the issue was a ethic failure but decided that was not a good reason to dismiss S.Bayartsogt from his MP position

S.Bayrtsogt confirmed that he did make a mistake by failing to include his offshore company and Swiss bank account and submitted his resignation as Deputy Speaker. The Parliament accepted his resignation.  

The resigned Deputy speaker spoke about his offshore entity saying "I should have included my Legend Plus Capital Limited offshore company in the income and asset declaration." 

But he said he didn't use the offshore entities to avoid taxes because the venture didn't produce any income.

If the Prosecutor General"s Office believes that a criminal proceeding is necessary the Office will submit a request to dismiss him as a Member of Parliament.  

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Business

Newcom: Introducing "Salkhit" Wind Farm, Mongolia

June 25 (Newcom) --

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De Facto: Interview with Stephan A. Fischer, organizer of Future Mongolia exhibitions

June 23 (Jargalsaikhan Dambadarjaa) --

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Ulaanbaatar

CLYDE & CO WISHES TO PROVIDE LEGAL ADVICE ON ULAANBAATAR METRO PROJECT

June 19 (InfoMongolia) On June 18, 2013, the Governor of the Capital City and Mayor of Ulaanbaatar E.Bat-Uul met with Ms. Ildiko Gergely, Senior Associate at the international law firm "Clyde & Co", and exchanged opinions to cooperate in the legal aspect of the "Ulaanbaatar Metro" project's construction work.

The easiest and most constructive solution for the capital city's traffic and air pollution issues is to establish a metro system. Once the metro is in operation, it is estimated that traffic will be decreased by 16 percent and what used to take 45 minutes to travel, will shorten to 15 minutes, saving a great amount of travel time.

During the meeting, Ildiko Gergely stated, "Although the metro system has many efficiencies such as economical and environmental, however, if the legal research is conducted poorly, it could lead to bankruptcy and drawbacks. There are many cases where countries around the world went bankrupt building a metro system. Therefore, the legal environment must be well established".

"In order to implement the very constructive "Metro" project in Ulaanbaatar city, your consulting and training, seminars are greatly significant. Therefore, I would like to express my gratitude for providing the opportunity for the officials in charge of the "Metro" project to meet with your firm associates to exchange opinions and ideas", expressed the Mayor of the city.

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Diplomacy

Mogi: I have no doubt that a large majority of Mongolians feel for our brothers on the other side of the border, but when you have a gun to your head as China does, it's a real Sophie's Choice moment.

Inner Mongolian asylum seekers shunned by 'outer' politics

By Michelle Tolson

June 24 (Asian Correspondent) President Tsakhiagiin Elbegdorj has been described as the "Ambassador for Mongolia" by local journalists for his ability to spread awareness of the country's growing democracy abroad. He turned a social guffaw captured in September 22, 2011, where his face was obscured by President Barack Obama's hand during a group photo of democratic leaders taken at the UN Democracy Forum, into a humorous press conference moment.  Yet during the conclusion of that same press conference, Mongolia's president side-stepped questions from the Southern Mongolian Human Rights Information Center (SMHRIC) about the country's official stance toward asylum seekers from Inner Mongolia, an autonomous region of the People's Republic of China regarding the deportation of Batzangaa October of 2009.

While the presenter let it go, Enghebatu Togochog, director of the SMHRIC, has not.  He spoke with Asian Correspondent from the office headquarters in NYC by phone and said the Mongolian government has a long history of deporting asylum seekers from Inner Mongolia.  "They are in a honeymoon with China."

However, Julian Dierkes, a policy expert from the Institute of Asian Research, told Asian Correspondent that the situation is more complicated.  "The conventional discussion of asylum would be to see it as a power play by China. Obviously, the Chinese government would not be too keen on Mongolia granting asylum to Inner Mongolian dissidents. On the other hand, if such dissidents gain any prominence, Mongolian politicians may be hard pressed to turn them down."

Batzangaa, perhaps the most controversial case to date, is an ethnic Mongolian doctor of traditional medicine from the city of Ordos in Inner Mongolia, whose situation was brushed off by the president of Mongolia during the press conference in 2011.  Enghebatu said Batzangaa was deported from Ulaanbaatar by Mongolian and Chinese police with the help of UNHCR.

Batusukhe, the younger brother of Batzangaa who is now seeking asylum himself in Mongolia, fully supports this claim.   Batusukhe met with Asian Correspondent in a popular coffee shop in Ulaanbaatar and explained how his brother came to be known as a "Chinese" dissident.

Batzangaa, a Chinese citizen, founded the Ordos Mongol-Tibetan Medical School in Inner Mongolia in 2001 with the full blessing of the Chinese government in support of ethnic heritage.  He  studied traditional Tibetan-Mongolian medicine in the Qinghai province of China, which is home to a sizable population of Tibetans.  After completing his studies, the brother returned to his province in Inner Mongolia as "the diaspora were sent to establish a school" said Batusukhe.  As the school was successful, in 2007 he asked the government of Dongsheng District permission to expand.  On April 19 of that year, the government approved his request and 5.2 million CNY was invested towards this based on donations from the Inner Mongolian community.

However, after the Tibetan uprisings in March 2008 across Tibetan-populated areas in the Qinghai, Gansu and Sichuan provinces, the school fell under suspicion for its strong ties to the region.  Mongolians share a nomadic and Buddhist history with Tibetans of revering the Dalai Lama.

Dierkes said "the Chinese government isn't threatened by pan-mongolism [a political movement to join Inner Mongolians with the country of Mongolia]—not like they are threatened with Tibetans. The Chinese government encourages traditional practices—unless they get a whiff of trouble."

This whiff of trouble led to swift action on the behalf of the Chinese government as just three months after the unrest, the lease to Batzangaa's school was cancelled on June 20, 2008.  He fought back and appealed to the government based on the prior official approval and recouped a portion of the investment losses but was subsequently pressured to cut ties with the Tibetan community.  According to Batusukhe, he refused, claiming he had done nothing wrong.  When he received death threats by text message, he fled with his family to Mongolia on May 26, 2009 to seek political asylum.

He registered with the UNHCR in Ulaanbaatar and was given four months of protection beginning June 27 as his case was reviewed.  Before his protection status had expired, Batzangaa was asked to come to the UNHCR office by his protection officer, where he was arrested October 3, 2009 by Mongolian and Chinese police.  Batusukhe showed Asian Correspondent copies of his brother's forms, also published by the SMHRIC.  The following day he was deported with his family back to China and placed under house arrest.

Batusukhe is disappointed with UNHCR:  "Why did this happen?  He had a certificate of alien registration and this had not expired yet.  I want to know from the head of UNHCR Geneva why they let this happen."

The Mongolian government has not signed the 1951 Refugee Convention or agreed to protect asylum-seekers.  The regional UNHCR office in Beijing states through its website that it is "advising the Government…in anticipation of accession to the Convention."  A UNHCR spokesperson in Ulaanbaatar told Asian Correspondent they recommended signing the convention during the Universal Periodic Review and the government agreed to "consider" it.  However when asked, a spokesperson at the Ministry of Foreign Affairs said they did not know any details.

While studying at a university in Japan Batusukhe became politically active, lobbying for ethnic Mongolian rights in China.  "My brother did not tell me to join.  It was my own choice."  As political activism is illegal under China's one-party system, this choice also brands him a dissident.

Batusukhe has also applied for asylum status with UNHCR in Ulaanbaatar, Mongolia and is registered from March 12, 2013 for a period of one year according to his official resident card.  Just one month after he applied for asylum, his brother was arrested by the Chinese government on April 13 for allegedly seeking asylum with a foreign embassy in Guangzhou, which violated the terms of his house arrest.  Since that time, the family has had limited contact and is worried about his safety.

While appreciating having a place to live in Mongolia as a registered asylum-seeker, Batusukhe said he does not feel safe because he thinks the Chinese police can take him "anytime," like his brother.

Xinhua News Agency reported that Batazagaa had embezzled money from his community, noting the Mongolian government had supported his repatriation.  However, both the SMHRIC and Batusukhe refute allegations of criminal activity and said this came only after he had refused to break his connections with the Tibetan community.

Where Batzangaa was repeatedly advised to not seek out foreign media while under asylum-seeking status, Batusukhe has learned from his brother's experience and would like the world to know Mongolians living in China are treated by their government when they embrace their cultural roots in a manner officially condoned by China's constitution.

There are three other Inner Mongolians seeking asylum in the country, including Tuvsingzaya who has a wife and two children whose asylum-seeking status expires in August.  He asks "Why does it [the asylum process] have to take so long?"

If President Elbegdorj is re-elected on June 26th, he might consider promoting an over-haul on the Mongolian government's stance toward asylum-seekers from Inner Mongolia.

About the author

Michelle Tolson has contributed to Inter Press Service (IPS), the Global Post, Women's Media Center, Women's International Perspective,  Women's News Network, the UB Post of Mongol News Group and the Phnom Penh Post.  She has also worked on research projects in New York City and Cambodia.   

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Social, Environmental and Other

ECOTOURISM PLAYING KEY ROLE IN MONGOLIA'S TRANSITION TO GREEN ECONOMY

As part of the World Environment Day 2013 celebrations that took place in Mongolia from June 1-5, we are running a series of special reports on environmental issues in the country. This story, which is free to use in full or in part, looks at the role ecotourism is playing as Mongolia looks to transit to a greener economy. Accompanying images and video are available (details at the bottom of the story). 

Ulaanbaatar, Mongolia, June (UNEP) - Only a few hours' drive from Mongolia's capital Ulaanbaatar, where the smokestacks of power plants darken the skyline and cars snarled in traffic honk day and night, there lies a tranquil paradise where such human hustle never intrudes.

Hustai National Park sprawls across hills that fold up from the earth and recede to a distant blue haze in a seemingly endless ripple of green landscape. 

Amidst the undulating lands, hundreds of Przewalski horses - once extinct in the wild - roam free alongside reindeer and wolves, while birds of prey soar on updrafts looking for a chance to pounce on marmots and other small mammals.

This oasis of nature, part of the landscape across which Mongolian herders astride horses have driven their herds for thousands of years, is playing a central a central role in a drive to shift the world's fast-growing economy to a greener path.

Mongolia grew hard and fast, reaching double digits for long periods, on the back of mining its natural resources. This drove a boom in traffic in the capital and the construction of the coal-fired power plants that make Ulaanbaatar one of the world's most-polluted cities.

As Environment and Green Development Minister Sanjaasuren Oyun puts it, "We are now paying for the pollution that took place during our transition."

Now, however, Mongolia is taking a long, hard look at its policies. The government is set to pass a new green development strategy that includes an increased focus on renewable energy, sustainable mining and ecotourism. 

"Like many developing nations, Mongolia is at the crossroads of a choice between a dirty, short-term development path and a far more sustainable long-term one," says UN Under-Secretary-General and UNEP Executive Director Achim Steiner. "Mongolia is choosing the sustainable path; that choice is to embrace a green economy pathway which may inspire other developing countries to take this route."

To highlight its commitment to the world, Mongolia played global host to World Environment Day in early June and officials say this is only the beginning.

"Environmental issues have been high on the priority agenda for Mongolia," says Mrs. Oyun. "I want to see us leapfrogging from a brown economy to a country that is an example of a green economy."

On World Environment Day, Mongolia was announced as one of would be one of the first countries in UNEP's Partnership for Action on the Green Economy (PAGE) - a major new initiative to assist the global transition to a green economy.

Hustai National Park, which currently attracts over 9,000 foreign visitors per year, serves as a model for the ecotourism that will play a crucial part in this new green strategy. Already, more money is being invested to ramp up the number of tourists nationwide.

Visitors to Hustai stay in yurts, the traditional round homes used by nomads as they moved their herd animals across the plains, and eat organic food that is sourced locally.

"In our camp we use solar power, and this is spreading over Mongolia; we are getting more eco step-by-step," says Tserendeleg Dashpurev, Deputy Director of Hustai National Park Trust. "We should develop tourism: it is a green economy and can develop green dollars."

One of the key attractions in Hustai is the Przewalski horse, which was reintroduced to the park on World Environment Day in 1992 from captive-bred Dutch stock after becoming extinct in its native land. Today, the horses prosper in the park and display all of their natural behaviours, including protecting their young from the snapping jaws of hungry wolves.

"In the 1960s, the last wild population of these horses went extinct," says D. Usukhjargal, the wildlife and wild horse biologist monitoring the horses. "In 1992, we transported 82 horses back and now there are over 280 living in the wild. Our plan is to reach a population of 500."

With such attractions, the park is also providing benefits to herders suffering from the negative effects of climate change. 

Mongolia's 2.1 degree centigrade rise in temperature over the last 70 years has led to drier conditions and degradation of pasture land, placing pressure on traditional herder communities.

Four years ago, the double impact of a summer drought followed by fierce winter snows killed millions of livestock, bringing disaster upon many communities.

"Climate change is happening before our eyes: it is getting dryer every year and the winters are getting longer; our pastureland can't support as much livestock and the herders now realize animal husbandry is not the only way to live," says Mr. Dashpurev. "They have guest yurts, and can take in in paying tourists for a traditional experience. The trust also contributes to the cost of solar panels to provide power and buys produce from them."

For Mr. Dashpurev, there is no choice but to start looking to a greener economy that adapts to the changing conditions and does not contribute to further climate change through the mining and burning of such resources as coal.

"Promoting ecotourism is not just idealism," says Mr. Steiner. "According to a recent UNEP study, the tourism economy represents five per cent of world gross domestic product and contributes to six to seven per cent of total employment. Sustainable tourism, including ecotourism, is the fastest growing part of this market and thus makes not only environmental but social and economic sense."

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2030 GREEN DEVELOPMENT POLICY AND GOALS APPROVED FOR PARLIAMENT SUBMISSION

Ulaanbaatar, June 24 /MONTSAME/ The Ministries of Environment and Green Development, and of Economic Development have worked out a concept of green development and a middle-term programme on green development, changing a draft strategy called "Green Civilization".

The cabinet meeting held Saturday decided to submit these documents to the State Great Khural, considering that these documents fully meet development policy and related projects.

The policy documents determine the green development concept and goals until 2030 and reflect economic measures to be taken until 2020. 

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WOOD & WOODEN MATERIALS IMPORT EXEMPTED FROM CUSTOMS AND VAT FOR FOUR YEARS

June 19 (InfoMongolia) On May 31, 2013, the Government of Mongolia notified the State Great Khural (Parliament) the drafts bills on Exemption of Customs Tax and Value Added Tax for wooden materials.

During the Parliament meeting held on June 07, 2013, the final discussion regarding the drafts bills was reviewed, resulting in the approval of exempting the oriented strand board (OSB) also known as sterling board, standardized and ready to assemble wooden building materials from Customs Tax and VAT, exempting round wood, wooden beams, sliced wooden materials that also meet standards and ready to assemble wooden building materials from VAT only.

This law is effective from June 07, 2013 until December 31, 2017.

Government considers by passing the laws, there is no negative impact in the budget as there is low income from the VAT on imported wood and wooden materials. However, the approval of the law and the increase of the import will provide a stable wood production, which is currently caused a decline in the forest reserve in the country, along with the increase of the budget income in forms of income tax and social insurance fee, and the increase in work places will have a positive result in society and the economy.

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Tertiary Education in Mongolia: Tackling Mongolia's Labor Deficit Problem

By Matthew Neckelmann – mneckelmann [at] gmail.com

June 25 (Asia Pacific Memo) The Mongolian economy is booming and  continues to enjoy an extremely high GDP growth rate. Economic opportunities for citizens in urban and rural settings abound. Mining is a major portion of the economy, with the massive Oyu Tolgoi mining project accounting for a third of Mongolia's GDP. While World Bank development projects focus on infrastructure development, economic governance and institutional strengthening of the mining sector, the demand for a sufficiently educated Mongolian workforce remains unmet.

This is not due to lack of higher education: the number of tertiary education institutions grew rapidly from 1991-2001. In the 2000s, education in Mongolia meant big business: rising tuition fees made the private education sector an attractive investment opportunity.

But the growth of private education has failed to train a workforce for the mining-based economy. Three key factors limit development of Mongolian tertiary education. First, there are too few well-trained professors, as low wages (around US$300 a month) discourage qualified personnel from pursuing academic careers. Second, the skills of many students who have studied subjects like business and liberal arts do not match the requirements of the mining sector, where skills in science and technology are needed. Lastly, access to education by students from low-income and rural families is limited because the majority of tertiary institutions are located in Ulaanbaatar and education costs are high.

As a consequence, skilled migrant workers from China take mining jobs that would otherwise go to Mongolians. However, many mining contracts require a certain percentage of the workforce for a particular project to be Mongolian. As demand continues to grow, workforce deficits are bound to become more problematic.

Further private investment focusing on providing training for specific skills that are in high demand might seem like a viable solution, but the education sector's growth in recent years has done little to solve skill deficit issues. Another option is directing aid from organizations like the World Bank to subsidize education for specific in-demand skills. As the economy continues to grow, the Mongolian government may find it cost effective to subsidize the education and training required for future workers in the mining industry.

Matthew Neckelmann is a candidate for a JD and MA in Asia Pacific Policy Studies at the University of British Columbia.

Links:

·         Higher Education Mongolia Policy Note, The World Bank

·         Overeducated? The Impact of Higher Education Expansion in Post-Transition Mongolia, Columbia University Academic Commons

·         Improving Labour Market through Higher Education Reform Project in Mongolia, The Asian Development Bank

Related Memos: 

·         See our other memos on Mongolia

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New Mexico State University International Education Growth Continues with Mongolia

June 24 (KRWG) New Mexico State University's College of Education continues to work globally, with educators having recently returned from a trip overseas during which they attended and spoke at an international conference and met with counterparts from Mongolian State University of Education.

Held in Ulaanbaator, Mongolia, the conference was focused on teacher education reform and child development and socialization.

In 2011, NMSU and MSUE signed a Memorandum of Understanding, based on the extensive work of Candace Kaye, an NMSU associate professor in curriculum and instruction and 2010-2011 Fulbright Teaching and Research Scholar.

The MOU is focused on "initiating a change in Mongolia from a teacher-centered to a student-centered approach to education, while providing an introduction to Western thoughts and ideas."

"Our learning so far indicates a concentrated focus on educational knowledge, reform and building a model of collaboration structured from ongoing discussions of MSUE's specific selection of needed areas," Kaye said. "Our learning continues to be linked with understanding the historical sociology and cultural anthropology of Mongolia that emphasizes the difference between a surface Westernization for an institution and an honored commitment for persisting culturally-specific patterns of meaning.

"As foreigners, we must continue to struggle with the notion of being looked upon as all-knowing experts and holders of all knowledge. We are offering no 'truths,' but rather, providing a banquet for discourse and are open to our colleagues in Mongolia to do the same."

Kaye and College of Education Dean Michael Morehead served as keynote speakers at the conference. The two were accompanied on the trip by Adelina Rodriguez, student program coordinator; Marlene Salas-Provance, special education and communication disorders department head; Jeanette Haynes Writer, department head of curriculum and instruction; Mary Prentice, educational management and development department head; and Julia Parra, assistant professor in curriculum and instruction.

The faculty also gave presentations based on their research interests.

Along with attending the conference, the NMSU group presented to Mongolian higher education students at the U.S. Embassy American Corner on perspectives of U.S. higher education.

The American Corners Program is a United States Department of State-sponsored initiative inaugurated worldwide. American Corners serve as regional resource centers for information and programs highlighting American culture, history, current events and government.

"Students had the opportunity to ask questions of all the presenters in their area of expertise," Rodriguez said. "It was an enriching experience, as there are so many students interested in furthering their education in the United States. The level of fluency of the English language from these students was amazing. In addition, we visited the College of Preschool Education and sat in on faculty presentations of their work in action research, which has been led by Dr. Kaye since 2010."

After initial visits between the two universities in November 2012 and May 2013, the partnering educators will examine an action plan that includes developing a webpage, summer 2014 student/faculty study tours to MSUE and a monthly online chat group for MSUE and NMSU students and faculty to discuss specific topics.

"For example," Kaye said, "the Mongolian colleagues suggested that the first topic be 'What is good teaching?'"

NMSU is the first university in the world to collaborate with MSUE through a formalized MOU.

"Our relationship with MSUE is very unique," Morehead said. "At this time we are developing the action plan to include collaborative research, partnerships with program development, coordination of professional development in special education and other high-need areas. Mongolia has a rich history, and can offer us a lot of opportunities to become more aware of current global issues."

The MOU highlights certain areas of collaboration, including:

·         exchange of students, faculty and administrative staff;

·         collaborative research projects, lectures, symposia, seminars and workshops; and

·         exchange of academic information and materials.

The signed agreement will last through 2016 and will be automatically renewed by mutual agreement for another five years.

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East and West Meet at 'Steppe Wind' Art Exhibit

June 24 (The Moscow Times) Most Muscovites learned about the centuries-old Mongol invasions that ravaged Russia in their early school years. However, Mongolian Otgoo Badam is being warmly welcomed as he re-conquers Moscow — not with the fabled arrows and swords but with something far mightier: his skilled paintbrush.

Badam's exhibit "Steppe Wind" is on display until July 5 at "Le Connaisseur" Gallery. The collection of about 30 paintings focuses on images of traditional Mongolian life, depicting horse races, hunters, and Khalkha Mongol brides. Muscovite art lovers do not seem to have been put off by the exotic subjects and still sense a certain familiarity in the paintings.

Over 20 percent of the works have already been sold since the exhibit's opening in May, and comments written in the gallery's guest book are filled with glowing praise for Badam's lifelike canvases.

"Everyone has their own favorite [painting]: some like the landscapes, others the portraits or equestrian scenes," said Kirill Belyaninov, director of "Le Connaisseur" Gallery, commenting that viewers had particularly appreciated Badam's portraits of children, the innocence of which seem to cut across cultural boundaries.

Even those who may not relate to Badam's scenes have complimented the stylistic quality. Though Badam's subject matter may be Mongolian, he paints in an intensely realist style, reminiscent of Russian painters of the early 20th century. Belyanov said his style of painting could be more accurately described as "Russian," which perhaps helps to explain his popularity.

This unique mix stems from Badam's past. While born in Ulaanbaatar, Mongolia, Badam has spent most of his adult life studying and working in Russia. Badam showed an early interest in painting, opting for art school in his home country.

In 2004, he won the first place in a competition at his school, securing a full scholarship to study in Russia despite a complete lack of knowledge of the Russian language.

His first studies took place in the southern city of Voronezh before he was admitted to the prestigious Repin Academy in St. Petersburg. It was there that his painting acquired its recognizably realist style. Badam now lives and works in Saint Petersburg.

Regardless of his Russian style, rise to fame, and relocation in the country's north, Badam has now become well known in his native Mongolia too. Belyaninov said that a number of his works had recently been bought by prominent Mongolian politicians, including Mongolian President Tsakhiagiin Elbegdorj.

The interest garnered here may well be partially due to the rarity of a Mongol artist displaying his works in the city. "He's the first Mongol I've ever met!" remarked Belyaninov.

The exhibit "Steppe Wind. Otgoo Badam" is on display until July 5th at the Сonnaisseur Gallery at 22 Myasnitskaya Ulitsa, Bldg. 1, Metro Chistiye Prudy. Tel. 495-623-1029.

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Mogi: god saves us, god save us all!

Electroboyz, Park Soo jin, SWITCH to vist Mongolia for K-Wave concert

June 24 (BNTNews) Korean hip-hop idol group Electroboyz, solo artist Park Soo jin and girl group SWITCH will visit to Mongolia for K-wave concert as part of special events for 'Senbeno Mongolia', which is a showcase to share culture between South Korea and Mongolia. 

Senbeno Mongolia will be held for four days starting from 4th of July until 7th of July in Mongolia. During four days, there will be a special K-wave concert, 1 day trip with K-wave fans, and appointment ceremony of honorary ambassador for protecting the environment. Also they will plant tress to prevent yellow dust and desertification. 

The event was to share cultures between two countries and save the environment. The event was planned and organized with Ministry of Nature, Environment and Tourism of Mongolia. Senbeno Mongolia will be held twice a year and plans to show various special events and culture.

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Email: mogi@covermongolia.mn

Mobile: +976 9999 6779

Skype: mogibb

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